Supply Chain Risks

Deficient Bridges Could Mean Supply Chain Woes

Ten percent of America's bridges are plagued by deficiencies or load restrictions, threatening supply chains.
By: | March 9, 2016 • 4 min read

In its 2015 report on the nation’s bridges, the American Road & Transportation Builders Association (ARTBA) labeled 58,500 U.S. bridges — roughly 10 percent — as structurally deficient.

Nearly half of those — 27,486 — have some sort of load restriction. While a slight improvement over 2014, the issue still represents potentially serious supply chain risks for many businesses, and the problem will not be going away any time soon.

Alison Black,senior vice president, chief economist, ARTBA

Alison Black, senior vice president, chief economist, ARTBA

“The good news is that we’re definitely seeing a reduction in the number of structurally deficient bridges out there,” said Alison Black, ARTBA senior vice president, chief economist and author of the report. “[But] at this pace, it will be over 20 years before we solve this issue.”

Between 2014 and 2015, 7,200 structurally deficient bridges were removed from the list, but those repairs and replacements, while representing long-term progress, can mean even more acute restrictions or outright closures in the short term.

And meanwhile, another 4,625 bridges were added to the list.

Supply chain interruptions from bridge restrictions can affect a wide variety of businesses.

“Things that have to be refrigerated, such as dairy, those kinds of industries, [or] retailers that might have a large distribution facility where you have a lot of concentrated economic activity in a very narrow space, those may be the businesses more likely to be affected,” said Vince Morgan, a partner in the law firm of Pillsbury Winthrop Shaw Pittman LLP who specializes in insurance law and risk management.

Clark Schweers, the leader of BDO’s Forensic Insurance and Recovery practice, added that specialty manufacturers who use volatile chemical compounds that require special care could also be impacted.

“It really impacts all industries in one way or another,” he said.

Clark Schweers, BDO’s Forensic Insurance and Recovery practice leader

Clark Schweers, BDO’s Forensic Insurance and Recovery practice leader

Bridge restrictions can also force trucking companies to reduce load sizes.

“It may be that you used to get two truck deliveries a week of a particular commodity … and now, because of weight restrictions, you have to get four trucks that each have lower weight loads. That adds to your expense and can disrupt your supply chain system,” Morgan said.

Closures or restrictions can also interrupt business by impeding customer access.

The ARTBA report does not include the nation’s 77,000 railroad bridges. According to Black, a 2007 GAO report said there is “little information publicly available on the condition of railroad bridges and tunnels.”

While road bridge workarounds can cause delays and increase business costs, Schweers pointed out that railroad bridges are often “a single source supplying multiple facilities that are reliant on those railroads,” making workarounds more elusive and supply-chain interruptions more problematic.

According to Schweers, traditional supply chain studies do look at transportation logistics, “but there probably has not been enough focus on the transportation infrastructure.”

Vince Morgan, partner, Pillsbury Winthrop Shaw Pittman LLP

Vince Morgan, partner, Pillsbury Winthrop Shaw Pittman LLP

“It starts with your business continuity plan and building a resiliency around that,” said Morgan.

“If there is a vulnerability from a transportation standpoint then you need to identify it and look at avenues to mitigate it before it becomes a real problem.”

Businesses can check with their state departments of transportation for information about transportation restrictions that could impact them.

“The information is based on bridge inspection reports, which happen every two years, so definitely checking in with the state DOT is the best way to get information about specific bridges,” Black said.

Schweers and Morgan advised businesses to check for gaps in their coverage. A single word or syllable can mean the difference between a loss that is covered or not.

According to Schweers, “the ingress/egress area, whether you have the word ‘prohibit’ or the word ‘inhibit,’ that one word right there can have a vastly different scope or meaning in terms of potential recovery within your insurance policy.”

Policies covering ingress or egress that is prohibited but not inhibited would cover losses from bridge closures, but not losses from weight or other restrictions.

“If you’ve got impairment language in the ingress/egress or civil authority provisions of your policy, that is going to trigger coverage,” said Morgan. “If you have prohibition language, you might have a harder hill to climb to get a covered loss.”

Morgan said there are rare instances of policies manuscripted to exclude specific bridges.

“It tends to be a specific case where a business is very dependent on a particular bridge and [the insurer] may have questions about the soundness of it,” he said. “But those are the kinds of things you need to look at in your policy and find out before it rises to an actual problem for you.”

Schweers agreed. “Having those discussions with your carriers and with your brokers outside of an actual loss is really a best practice and something that we would recommend for all parties, to sit down and explain the risks to the business and try to determine whether or not the policy would be triggered in a given situation.”

Jon McGoran is a novelist and magazine editor based outside of Philadelphia. He can be reached at [email protected]

More from Risk & Insurance

More from Risk & Insurance

4 Companies That Rocked It by Treating Injured Workers as Equals; Not Adversaries

The 2018 Teddy Award winners built their programs around people, not claims, and offer proof that a worker-centric approach is a smarter way to operate.
By: | October 30, 2018 • 3 min read

Across the workers’ compensation industry, the concept of a worker advocacy model has been around for a while, but has only seen notable adoption in recent years.

Even among those not adopting a formal advocacy approach, mindsets are shifting. Formerly claims-centric programs are becoming worker-centric and it’s a win all around: better outcomes; greater productivity; safer, healthier employees and a stronger bottom line.

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That’s what you’ll see in this month’s issue of Risk & Insurance® when you read the profiles of the four recipients of the 2018 Theodore Roosevelt Workers’ Compensation and Disability Management Award, sponsored by PMA Companies. These four programs put workers front and center in everything they do.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top,” said Steve Legg, director of risk management for Starbucks.

Starbucks put claims reporting in the hands of its partners, an exemplary act of trust. The coffee company also put itself in workers’ shoes to identify and remove points of friction.

That led to a call center run by Starbucks’ TPA and a dedicated telephonic case management team so that partners can speak to a live person without the frustration of ‘phone tag’ and unanswered questions.

“We were focused on building up a program with an eye on our partner experience. Cost was at the bottom of the list. Doing a better job by our partners was at the top.” — Steve Legg, director of risk management, Starbucks

Starbucks also implemented direct deposit for lost-time pay, eliminating stressful wait times for injured partners, and allowing them to focus on healing.

For Starbucks, as for all of the 2018 Teddy Award winners, the approach is netting measurable results. With higher partner satisfaction, it has seen a 50 percent decrease in litigation.

Teddy winner Main Line Health (MLH) adopted worker advocacy in a way that goes far beyond claims.

Employees who identify and report safety hazards can take credit for their actions by sending out a formal “Employee Safety Message” to nearly 11,000 mailboxes across the organization.

“The recognition is pretty cool,” said Steve Besack, system director, claims management and workers’ compensation for the health system.

MLH also takes a non-adversarial approach to workers with repeat injuries, seeing them as a resource for identifying areas of improvement.

“When you look at ‘repeat offenders’ in an unconventional way, they’re a great asset to the program, not a liability,” said Mike Miller, manager, workers’ compensation and employee safety for MLH.

Teddy winner Monmouth County, N.J. utilizes high-tech motion capture technology to reduce the chance of placing new hires in jobs that are likely to hurt them.

Monmouth County also adopted numerous wellness initiatives that help workers manage their weight and improve their wellbeing overall.

“You should see the looks on their faces when their cholesterol is down, they’ve lost weight and their blood sugar is better. We’ve had people lose 30 and 40 pounds,” said William McGuane, the county’s manager of benefits and workers’ compensation.

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Do these sound like minor program elements? The math says otherwise: Claims severity has plunged from $5.5 million in 2009 to $1.3 million in 2017.

At the University of Pennsylvania, putting workers first means getting out from behind the desk and finding out what each one of them is tasked with, day in, day out — and looking for ways to make each of those tasks safer.

Regular observations across the sprawling campus have resulted in a phenomenal number of process and equipment changes that seem simple on their own, but in combination have created a substantially safer, healthier campus and improved employee morale.

UPenn’s workers’ comp costs, in the seven-digit figures in 2009, have been virtually cut in half.

Risk & Insurance® is proud to honor the work of these four organizations. We hope their stories inspire other organizations to be true partners with the employees they depend on. &

Michelle Kerr is associate editor of Risk & Insurance. She can be reached at [email protected]